Page Industries - All Eyes On Inventory Liquidation; The Moat Remains Unchanged: Motilal Oswal

Motilal Oswal Report

Page Industries Ltd. has had a remarkable track record of revenue and earnings growth over the past decade. For the decade ending FY24E, Page Industries’ sales/Ebitda/profit after tax are likely to post a 15%/14%/15% compound annual growth rate despite a challenging period.

Earnings growth was fueled by best-of-breed sales growth, coupled with reduced utilisation of the margin lever.

We model a gradual recovery with sales/Ebitda/PAT AGR of 14%/17%/18% over FY24-26E.

The industry is likely to continue facing demand-led headwinds in the near term. Additionally, it will be crucial to monitor the channel inventory optimization. Though efficient cost-control measure is a positive sign, earnings outlook is still uncertain.

We reiterate our Neutral rating on the stock with a target price of Rs 36,500 (premised on 50 times March-26E earnings per share).

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